John Drescher

How investigative reporting creates huge public benefits

James T. Hamilton, author of "Democracy Detectives."
James T. Hamilton, author of "Democracy Detectives." Courtesy of James T. Hamilton

When Pat Stith, investigative reporter at The News & Observer, wrote about a payroll error at the N.C. Department of Transportation, more than 12,000 state employees repaid the state $2.4 million.

When Stith reported that Gov. Jim Hunt used state-owned aircraft for campaigning, Hunt’s Senate campaign reimbursed the state $415,000.

When Stith showed that three nursing homes in Eastern North Carolina had been overpaid by the state, the operator was ordered to repay $300,000.

Stanford economist James T. Hamilton has assessed the direct financial impact of 26 of Stith’s stories, a small part of Stith’s work at The N&O from 1971 to his retirement in 2008. Those stories prompted $4.7 million in repayment, reimbursement, fines or other transfers of funds. (All of the dollar figures are adjusted for their value in 2013). The $4.7 million doesn’t include the value to society of many of Stith’s stories that led to changes in law and policy.

Hamilton’s assessment is included in his book “Democracy’s Detectives: The Economics of Investigative Journalism,” which was published in the fall by Harvard University Press. The book recently won the prestigious Goldsmith Book Prize for the best U.S. academic book about the media, politics and public policy.

Hamilton and Stith will speak about the book and take questions Thursday at 7 p.m. at the N.C. Museum of History at 5 E. Edenton St. in downtown Raleigh. The event is free but registration is requested at For information, call 919-807-7873.

New laws

Stith, 74, is the star of Hamilton’s book and the subject of the chapter, “A Single Investigative Reporter.” Hamilton writes: “Pat Stith’s work shows that a single reporter can consistently change laws and lives....Generating nearly one new law each year he worked as an investigative reporter, Pat Stith produced investigative reports that led to the passage of thirty-one laws in North Carolina.”

But Hamilton also writes about investigative work after Stith’s retirement, including The N&O’s December 2008 report on problems with North Carolina’s probation system.

We found that those on probation often received little or no supervision. More than 550 offenders had been convicted of killing someone since 2000 while on probation.

The state responded with changes. It added probation officers and a new computer system that alerts officers when probationers are arrested. Probation officers were given new powers to search offenders and more access to juvenile records.

Hamilton read the series and decided to dig deeper on the benefits of investigative reporting.

Fewer deaths

Hamilton, 55, who was educated at Harvard and taught at Duke for more than 20 years, estimates that changes made by the state led to at least eight fewer homicides in North Carolina in 2010.

Using federal figures on the statistical value of a life (based on wage studies), Hamilton says the eight deaths averted by the policy changes were worth $73 million. The state spent $11 million to improve the probation system for a net benefit of about $62 million.

While many news outlets have cut investigative reporting in the last decade, The N&O has expanded its investigative team. In the book, Stith says the collection of investigative work at The N&O several years after his retirement was “the best in the last 40 years.”

Hamilton worries that changes to newspapers’ financial models means they won’t be able to support investigative reporting as they have in the past. There is evidence newspapers are doing less investigating, including that Freedom of Information requests by local newspapers at some federal agencies dropped by almost half from 2005 to 2010.

But Hamilton also says there are new tools working in journalists’ favor. Better use of data and algorithms could cut reporting time, which typically is the most expensive part of investigative reporting.

Also, digital sites could tailor a story to your location and reading preferences, adding video, geographic-specific graphics and other storytelling elements – and charge a fee in exchange.

The stakes for democracy are high. The old print-heavy advertising model is gone, Hamilton writes, but the need for investigative journalism is not.

John Drescher: 919-829-4515, @john_drescher